Investor Report: Andean Region

The sudden departure of benign global conditions this
year took Latin America’s rising star
economies by surprise. Chile, Colombia and Peru must now work
out how to deal with the consequences.

Investors are gearing up for an end to the abundant
liquidity that has characterized the post-crisis period.
Growth in China is slowing as its economy rebalances away
from export-led growth. Already, falling commodities
prices are hitting economic forecasts, and capital markets
are braced for an eventual change in US monetary policy.

Yet, the region also has much to celebrate.
Peru’s credit rating was upgraded in
late August in spite of falling commodities prices. Andean
financial markets and systems are deepening and expanding,
and becoming more self-sufficient.

Colombia’s banks are advancing on a wave of
international acquisitions, snapping up lenders across
Central America as European banks retreat. Their financial
regulator is keeping a watchful eye on the systemic
implications, but so far, the deals appear to offer a
chance to diversify away from a domestic economy whose fortunes
are closely linked to the oil price. We speak to the
chief executives of Banco de Bogotá and
Bancolombia about the risks, and rewards, of
expanding away from home.